THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: The outgoing defense secretary, Chuck Hagel, responds to new questions about the prisoner swap that freed a U.S. soldier and is it having dangerous consequences?

Terrorist terror video. The images of the kosher supermarket attack that the world hasn't seen before. We're learning new information about the pictures recorded by the gunman in the midst of the rampage.

And Romney says no just when he seemed open to running for president of the United States again. The Republican says, never mind. Who gains most from his decision?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get right to breaking news.

CNN confirming that the Paris terrorist who attacked the kosher supermarket had a camera with him and recorded his bloody rampage as it was happening. Stand by for new information on that.

Also breaking right now, a sneak attack by ISIS terrorists. They are taking their brutal fight for land and power into new territory, a strategic oil-rich city. The chairman of the House Foreign Affairs Committee, Ed Royce, he is standing by along with our correspondents, our analysts. They're all covering the news that is breaking right now.

But, first, let's get to the Paris terror attacks and the shocking video taken by the gunman at that kosher supermarket. CNN confirms he was recording in the midst of the slaughter. And according to a new reporter out of France, the gunman had a GoPro camera strapped to his body. Authorities now believe he e-mailed the video to Islamic terrorists.

That comes from a French national security reporter who has been doing some joint reporting with CNN.

It's a seven-minute video. French investigators have watched the video. It showed Amedy Coulibaly storming into that kosher store in Paris and killing three people that he is filming from the GoPro camera on his torso. They have also established that he e-mailed out the video to some kind of accomplice somewhere.

The fear right now is this will emerge on a jihadi Web site, perhaps a pro-ISIS jihadi Web site. We saw a previous video that he put out emerge on a pro-ISIS Twitter stream. So real concern that the horrendous video images are going to soon hit jihadi Web sites.

BLITZER: The concern is specifically that he was recording on this GoPro video strapped to his torso, to his chest, if you will, when he murdered those four Jewish men in that kosher supermarket? Is that what they suspect he was recording?

CRUICKSHANK: Well, they not only suspect it. They actually have seen the video, French investigators, of the horrible murders taking place in the Jewish supermarket.

They have also now established through technical assessments of the computers that they recovered from the supermarket that he managed to e-mail out this footage to some kind of associate somewhere. They suspect probably somebody with some ties to a jihadist group.

The worry is that this footage will get out there, it's going to be used by propaganda purposes by a group like ISIS. Of course, Amedy Coulibaly swore allegiance to ISIS leader Abu Bakr al-Baghdadi, although he wasn't himself formally part of the terrorist group, Wolf.

BLITZER: We're going to stay on top of this and see if the videos surface on those ISIS or al Qaeda or whatever social media sites. Paul Cruickshank, thanks very much.

Let's get now to that other breaking story we're following, the sneak attack by ISIS terrorists.

Our national security correspondent Jim Sciutto is joining us. He has got more on what's going on here -- Jim.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Wolf, this was a large, coordinated surprise assault on a crucially important city in the north. ISIS fighters advancing under the cover of fog killing the most senior Kurdish commander in Kirkuk and several of his guards right in the center of the city and sparking a running gun battle.

It's a powerful demonstration of ISIS' ability to project power on multiple fronts at once.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): A new front in the war against ISIS, ISIS militants launching a coordinated surprise attack on the oil-rich Iraqi city of Kirkuk, a hail of gunfire as Kurdish forces fight back against ISIS fighters holed up in this abandoned hotel in the center of town. Here, Kurdish fighters raid the building to retake control.

REAR ADM. JOHN KIRBY, PENTAGON PRESS SECRETARY: It's no surprise to us that they can contained or can demonstrate the ability to continue to wreak violence.

SCIUTTO: On the other side of town, however, ISIS advanced, using burning tents belonging to Kurdish fighters. Among the dead there, Kurdish commander Brigadier General Shirko Fateh, shown here in an interview with CNN's Arwa Damon last summer. He was the highest- ranking Peshmerga commander in Kirkuk.

Representative Adam Schiff, ranking member on the House Intelligence Committee, sees ISIS desperate to demonstrate its strength.

REP. ADAM SCHIFF (D), CALIFORNIA: ISIS is feeling a lot of pressure. They have lost ground in the Kurdish areas. They have lost some ground to Iraqi special forces. They had the symbolic loss in Kobani. At the same time, they are very lethal, but they are worried I think about pressure being put on Mosul and supply lines being cut off to Mosul.

SCIUTTO: Iraqi forces are now planning a major assault to retake Mosul, possibly as early as this spring. Kurdish forces have already launched attacks to cut off ISIS supply lines to the city.

Tonight, the fate of ISIS hostages, the Jordanian pilot, Muath Kaseasbeh and Japanese journalist Kenji Goto, remains in painful limbo, more than 24 hours after the latest deadline passed, still no proof of life or otherwise.

The only update Japan's government spokesperson can offer today was, "There is nothing I can tell you."

(END VIDEOTAPE)

SCIUTTO: Some new developments now.

A short time ago, Central Command announcing a coalition airstrike killed ISIS chemical weapons expert Abu Malik. The strike took place on January 24 near Mosul in the north. According to CENTCOM, Malik worked in Saddam Hussein's Muthanna chemical weapons production facility before joining al Qaeda in Iraq, that of course ISIS' predecessor and he joined in 2005.

What is interesting about that it reminds you ISIS has its roots going back a decade to al Qaeda in Iraq. Remember, the U.S. coalition declared victory over al Qaeda in Iraq. And of course ISIS came back to rear its ugly head again.

BLITZER: Correct me if I'm wrong. It's a little unusual for the U.S. military's Central Command to announce not only that -- they announce strikes all the time. But they announced the targeted killing of an individual, of an ISIS commander. That's pretty unusual, isn't it?

SCIUTTO: It is. But they have done it for senior commanders before. And I have to say that watching this announcement come out and as we have seen this through the course of the air campaign, it reminds me of those days covering the Iraq war when you would have these announcements of who was killed and with great fanfare when you would kill the leader or senior leader of some of these organizations with the impression given that by doing that you strike a decisive blow, when we know the fact is these guys get replaced very quickly.

This one had particular knowledge of chemical weapons. Might be more of an impact and that's CENTCOM's position on their ability.

BLITZER: Fair point. Thanks very much, Jim Sciutto.

Officials in Jordan and Japan, they are desperately trying to get information about their citizens held captive by ISIS and whether they are dead or alive.

Let's go to CNN's Will Ripley in Tokyo for the very latest.

What are you learning over there, Will?

WILL RIPLEY, CNN CORRESPONDENT: What's especially frustrating right now, Wolf, for the Japanese government and Jordanian government is the lack of a direct line of communication with ISIS.

Monitoring social media accounts for postings about this terror group's next move is one of the only ways that information is coming in. There are a number of unconfirmed reports right now. ISIS has had direct contact with the wife of one of the hostages, Kenji Goto. Their last threat was very ominous saying that if she did not do her part to expose their propaganda to the world that they threatened to kill her husband.

Of course, that's in addition to the threat to kill the Jordanian pilot. But the key issue here, the key problem is that you have a world power like Japan, a regional power like Jordan, two key U.S. allies that are being forced to essentially wait on a terror group like ISIS that appears to be trying to drag this whole thing out to elevate their own status.

They have continued to dominate the headlines for more than a week now. Yet these governments, because two innocent lives are on the line, Wolf, they have no choice at this moment but to do what they can to try to work out a deal with a group, even as there are increasing fears and increasing questions about whether ISIS is really serious about a prisoner swap or if they are just trying to keep this going as long as possible, playing a game with these two major governments -- Wolf.

BLITZER: Yes, let's hope these two hostages are released and released soon. Will Ripley in Tokyo, thank you.

We got breaking news. I want to get straight to our Pentagon correspondent, Barbara

Starr. She just finished an exclusive interview with the outgoing defense secretary, Chuck Hagel.

Barbara, he was very candid with you about your reporting on the swap of the prisoners, the five Taliban prisoners for Bowe Bergdahl, the U.S. Army sergeant, the pressure he has been under. Tell us what he told

you.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, the secretary is just a few days away from leaving office. Tonight, he gave us this interview and surprised us with his candor.

We started by talking about that swap five for one for Bowe Bergdahl and the overall program that he is in charge of to release prisoners, detainees from Guantanamo Bay. He had an awful lot to say.

(BEGIN VIDEOTAPE)

STARR: The five for one still the right decision in your mind?

CHUCK HAGEL, U.S. DEFENSE SECRETARY: Absolutely, it was the right decision.

It was the right decision, Barbara, because we don't leave our troops behind. That has been the culture of the American military since George Washington. And we don't do that.

It was clear that Bergdahl was a prisoner of war. The circumstances surrounding that, we have investigated. That investigation is over. And I am absolutely as committed to that decision today as when the decision was made.

It was the right decision. Are you concerned when you release any detainee from Guantanamo? Of course, because there is no 100 percent guarantee of anything. And I think I have got a pretty clear record on this.

In fact, not everyone at the White House has agreed with how I have handled some of this. I have made it very clear that I will not certify, sign anything to release a detainee as long as I'm secretary of defense unless I am convinced that it's in the best interest of this country and a substantial mitigation of risk can be verified as closely as we can verify.

STARR: You just brought up -- you said it -- not everyone at White House agrees with you. Tell us what you mean.

HAGEL: Well, I think the press has been pretty clear on that.

STARR: Let's hear it in your own words. Let's have you.

HAGEL: Well, what I have said is what I just said. Not everyone at the White House has agreed with me.

STARR: On what part of this?

HAGEL: Probably on the pace of releases.

STARR: Because you have been cautious?

HAGEL: Because I have the responsibility. And I play my own game here. And that is because, by law, I am the one -- the one official in government charged with certification of release of detainees. I take that responsibility very seriously.

STARR: Have you had pressure?

HAGEL: We have had a lot of conversations.

STARR: With the White House?

HAGEL: Yes, and Congress, and the press.

STARR: You don't seem too fussed by the notion that maybe there has been a little pressure from the White House. You're not fussed by that.

HAGEL: Barbara, I have been in this town a long time. And there is pressure all the time in every job that comes from a lot of different directions.

And if you are not prepared to deal with pressure every day in the job you are in coming from a lot of different directions, then you shouldn't be in the job.

(END VIDEOTAPE)

STARR: Look, Wolf, I have to tell you, we have covered Secretary Hagel since the day he took office.

He has never publicly been this candid about that pressure from the White House. What is the pressure? We know -- and he is now confirming it -- that the White House wanted him to move faster on approving the release of detainees from Guantanamo Bay and the White House wanted him to approve more of them.

And Chuck Hagel says, look, I'm responsible for national security on this. I'm not going to sign any of these transfers unless I'm convinced it's the right thing to do. On the Bergdahl one, he is convinced. He says he still thinks the problem with that one detainee can be handled.

But, truly, Wolf, an extraordinary admission from the secretary in his last few days in office that, yes, he was pressured by the White House -- Wolf.

And it will certainly revise all of those suggestions at the time of his announcement of his resignation that he wasn't very happy with what was going on, the pressure he was getting from the White House, right?

STARR: I think that this now is a big hint, perhaps even just straight up an acknowledgment by Chuck Hagel in his final days that he is going to say what he thinks. He has been under pressure since all of the kerfuffle, was he fired, was he pushed out, did he resign?

Look, it's very clear now that there were differences with the White House. He was a real gentleman about it, trying not to say too much. But we know in these last few days in office, we now know that his view is, he can be more candid, he can say what he thinks, he can offer his views, his opinions, and really nobody can do anything to him now. He is leaving -- Wolf.

BLITZER: He certainly is.

I want you to stand by, Barbara, because we want to run more of this more exclusive interview you had. He is very blunt, the outgoing defense secretary.

REP. ED ROYCE (R), CALIFORNIA: Well, I think he was very straightforward about the pressure.

And considering the pressure that he is under, if we look at some of the individuals released, Fazl, Noori, these were individuals who participated in what was called the worst atrocities that occurred.

BLITZER: These are among the five that were freed in exchange for Sergeant Bowe Bergdahl?

ROYCE: That's correct. And two of them were involved in atrocities in which 5,000 minorities were slaughtered and in which women were abducted and raped.

And so the question now that the story has surfaced that one of them is already in contact again trying to rejoin the fight brings up the whole question of the history of those who have been released from Guantanamo; 30 percent of them have been involved in some way in getting back into action.

And, of course, Americans are targeted. British have been targeted by these former Taliban leaders. And this is on the conscience and it was on the shoulders of our secretary of defense.

BLITZER: I want you to stand by, Mr. Chairman. We have more to discuss, more of this exclusive interview coming up. We will take a quick break -- much more of the breaking news right after this.

(COMMERCIAL BREAK)

BLITZER: We're back with the House Foreign Affairs Committee Chairman Ed Royce. Congressman, we are getting more of Barbara Starr's exclusive

interview with the outgoing defense secretary, Chuck Hagel.

In fact, I want to go back to Barbara at the Pentagon right now.

Barbara, you had a chance to sit down exclusively with the defense secretary. What else did he tell you?

STARR: Well, Wolf, a couple of minutes ago, we were talking about his candor as he is now in his last few days in office.

And, also, that candor extended to the current coalition campaign to fight ISIS in Iraq and Syria. One of the big issues on the table is, would there be a recommendation to President Obama that a small number of U.S. ground forces might have to go into Iraq, not the advisers and trainers that we have now, but actual ground forces to go help the Iraqi forces as they make their advances?

These people would help collect intelligence, point out targets, go right to the front lines. The secretary was unusually candid, let me say. He had a few caveats, but he also had a bottom line.

(BEGIN VIDEOTAPE)

HAGEL: He said to his combatant commanders, specifically General Dempsey and General Austin, if you believe and you want to recommend, you think you need to recommend to me, to the president, that we should look at other options, then I want you to bring those recommendations to me.

That, so far, has not happened. Whether that would happen in the future, again, the president has said to his commanders, if you think this is what's going to be required, I need to know it. You need to make the recommendation. I will listen.

STARR: What do you think?

HAGEL: Well, I think, just as the president has said -- and it is the advice have I given the president, it's what General Dempsey has -- is that we have to look at all the options.

And I think it may require a forward deployment of some of our troops, not doing the fighting, not doing the combat work that we did at one time for six years in Iraq and we did for many, many years in Afghanistan, but to help airstrike -- precision...

(CROSSTALK)

STARR: Locate targets, intelligence?

HAGEL: Locate -- those are things where we could continue to support.

I would say, though, we're not there yet. Whether we get there or not, I don't know. Whether that's something that our military commanders would recommend into the future, I don't know. But I think, just as the president has made clear, I need to know your honest opinion. And he has been very forthright about that, what you think, if that's something that you think is required.

STARR: But you are saying -- you are saying you think it could be necessary.

HAGEL: It could be. But I'm not willing to say that it will be necessary. I say it could be necessary.

(END VIDEOTAPE)

STARR: He is saying, I think it may require forward-deployed U.S. troops.

He is caveating that. But what we are seeing for the first time is an insight into his direct advice to President Obama. And let's keep in mind where we are on this. Now we know Defense Secretary Hagel, outgoing, but still, the chairman of the Joint Chiefs, General Martin Dempsey, the head oft U.S. Central Command, General Lloyd Austin, all have now talked about this, that this could be on the table for President Obama to decide -- Wolf.

BLITZER: Excellent work, Barbara. I'm so glad you followed up and you pressed him for answers. That's what you are supposed to do and you did it. You did it well. Thanks very much.

Let's get back to the chairman of the House Foreign Affairs Committee, Ed Royce.

So, forward troops, that sounds, sounds like it could be combat troops, even though they might be advisers. If the Iraqi military and the Kurds, the Peshmerga, they are going to go into Mosul, let's say, to try to retake that huge city of nearly two million people, and U.S. troops will be forward troops, that's a pretty dangerous operation, whether you call them ground troops or combat troops, whatever you call them. They potentially are in harm's way.

ROYCE: On our committee, we are going to hear from John Allen next week, Wolf.

And he was the general -- he is retired now -- in charge of the awakening of working with those Sunni tribes at that time. His current job is working with the State Department in the State Department on that same project.

So he will lay out to us the way in which some of our special ops and military officers were able to work with the tribes in order at the time to get them to push back on al Qaeda and some of the concepts from his perspective about what could be done to take down ISIS on the ground.

BLITZER: Well, what's your reaction to what we just heard from Chuck Hagel?

ROYCE: Well, I think that's the dialogue. And that's what we're going to hear from John Allen. How can some of our special ops work with these Sunni tribal

leaders who are expected now to push or play a big role in pushing ISIS out of their territory in Syria, in Iraq?

BLITZER: Do you have any confidence in the Iraqi army?

ROYCE: Well, we don't have a lot of confidence in the Iraqi leadership.

And one of the reasons is because they continue to allow Shia militia, in which Iran plays a big hand, to come in here and be engaged in all of this. And every time it happens, of course, it is more disrupting. We have watched the Quds Force and the Iranian...

BLITZER: Those are the Iranian forces.

ROYCE: Yes, the Iranian special forces, we have watched them now from Lebanon into Syria into Yemen into Iraq, all through the region.

And this is very, very concerning, because wherever they go, you can notice how they destabilize the local situation. They just did it in Yemen.

BLITZER: You have heard of these reports of a massacre this week, that an Iraqi Shiite militia went into a Sunni area.

Survivors say -- this is the report that we got -- Iraqi forces watched, Iraqi military forces watched as Shiite militias executed 72 Sunnis, including young little boys, and the Iraqi military just stood by and let this happen.

ROYCE: The reports, to read them -- and, of course, they are reports at this point. We have got to follow up.

But to read that Iraqi soldiers stood there crying, but not stepping in to stop the Shia militia show the arm that the Iranians have now into the country. And the fact that the leadership in Baghdad won't stand up and stand down the Shia militia that are influenced by Iran and the fact that Iran continues to push these types of tactics is very, very concerning.

BLITZER: So, you blame Iran, if this massacre is in fact concerned? You directly blame Iran for that?

ROYCE: We worked against -- we worked to push Maliki to stop the use...

(CROSSTALK)

BLITZER: That's the former prime minister, Nouri al-Maliki.

ROYCE: The former prime minister. We're working to push the current prime minister...

BLITZER: Abadi. ROYCE: ... explaining to him, if you are going to be able to

bring order here, you have got to get the Iranians out, you have got to get these Shia militia to stand down, let the military do its job.

But to allow these sectarian militias, which are often led by Iranian forces, come in and do the types of butchering they have done, this has been a disaster all through the region.

BLITZER: And if these reports of this massacre are confirmed, it will so poison this relationship, which is already horrible, between Iraqi Sunnis and Iraqi Shia. Who knows what is going to happen down the road.

ROYCE: It is tragic.

BLITZER: Mr. Chairman, thanks very much for joining us.

ROYCE: Thank you, Wolf.

BLITZER: Ed Royce is the chairman of the House Foreign Affairs Committee.

More breaking news coming up -- the shocking report that the terrorists who attacked that kosher supermarket in Paris e-mailed video of the attack. Who has that video right now?

Plus, Mitt Romney' surprise announcement today -- he is out of the 2016 race for the White House.

(COMMERCIAL BREAK)

BLITZER: We're following breaking news. The outgoing Defense Secretary Chuck Hagel telling Barbara Starr in an exclusive interview that the White House pressured him to release some detainees from Gitmo. Let's get some more on what's going on, some analysis.

Joining us our counterterrorism analyst, Philip Mudd, he is here in THE SITUATION ROOM, and also the former U.S. Congresswoman Jane Harman. She was a member of the Homeland Security Committee. She is the leader of the Wilson Center. She is also here in THE SITUATION ROOM, and our terrorism analyst, Paul Cruinshank. He is joining us as well.

Jane Harman, he was very blunt, the outgoing defense secretary. He didn't mince any words. He didn't like some of the pressure he was getting from the White House on some of these key decisions he as the defense secretary of state had to make.

JANE HARMAN (D), FORMER U.S. REPRESENTATIVE: The White House is involved in a lot of cabinet decisions. I'm not surprised to hear this. I don't have any specific information. It's just a shame it seems to me that the independence of the Defense Department and the expertise wasn't let loose on this situation. I think the trade turns out in hindsight to have been ill advised.

BLITZER: The Bowe Bergdahl trade, you don't like it? The U.S. policy is to try to bring all our military men and women home.

HARMAN: I don't think it was thoroughly vetted who the five guys were. I get it about him, but I think the five guys turn out to be problematic. A number of -- I do know this. A number of key people in the administration were not consulted before the trade was made.

BLITZER: That's a pretty serious situation. What do you think about all of this, especially the blunt talk that we heard -- Barbara Starr did an excellent job getting him to answer questions. He clearly seemed a little bit frustrated. It may have been one of the reasons why he's no longer the secretary of defense.

PHILIP MUDD, FORMER CIA COUNTERTERRORISM OFFICIAL: This is Washington, D.C. on sensitive policy issues for the White House to press the department of defense is not a big surprise. I say, people are speculating on whether you could have gotten a better deal. We're playing in the Taliban casino.

We have five of their guys. They are going to kill a U.S. soldier. You can say we want a better deal. The Taliban will say no. It brings them home for a bad deal or let him die in Afghanistan. There's no easy way out of that.

BLITZER: What do you think, Paul? You have studied this closely.

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Yes. These were five pretty senior guys in the Taliban. Some of them had ministerial experience. So I think, you know, the concern is that some of them may at some point try to rejoin the Taliban struggle.

But these were not people who were sort of operationally active in terrorist plots. These were leaders of the Taliban that were released, people who were getting on in terms of age as well.

BLITZER: It looks, Jane Harman, like there's a stall right now in the potential swap of the female terrorist, that would be suicide bomber held by the Jordanian government for the last 10 years or so in exchange for that Jordanian F-16 fighter pilot and that Japanese journalist. What's your analysis of what's going on?

HARMAN: Well, I think there's no adequate proof of life. I think that's --

BLITZER: Of the Jordanian pilot?

HARMAN: Of the Jordanian pilot. I think Jordan desperately wants to get him back. He apparently is -- either he or his family are very critical people in Jordan, plus they want their pilot back. Same conversation we just had.

Giving her up is something that I find surprising. I remember being in Congress during that hotel bombing and how outraged the Jordanians were. It was a tipping point really in terms AQAP in terms of its ugliness of Muslim on Muslim violence. I'm surprised they would think about this. BLITZER: Why hasn't there been proof of life? That's what the Jordanian government -- they are very close to the United States. They want evidence that fighter pilot is alive.

MUDD: I think there's a growing question here. That's whether ISIS was serious to start with. We started with a $200 million demand. Nobody would ever take that seriously. The one on one looked reasonable. I wonder whether they are trying to sugarcoat what is the decapitation of another prisoner.

BLITZER: You know, Paul, you are reporting it. You have good information. This videotape apparently that Amedy Coulibaly, the terrorist who went into the supermarket killed the four Jewish men, that he was recording it. He had a camera on his body, one of the go pro cameras. It was sent out at the time to some accomplice. It's about to go public on some terrorist web site. Tell us what's going on.

CRUICKSHANK: That's right, Wolf. It's a seven-minute video. Investigators have watched this thing. You see three of the hostages being killed when Amedy Coulibaly storms the Jewish supermarket in Paris earlier this month.

Through technical assessments, they have established -- they actually managed to e-mail this out to some associate. This information was provided to CNN by a national security reporter who has been doing joint reporting with CNN.

It is astounding that he filmed this with a Go Pro camera attached to his torso. There has been precedent for this. In 2012 there were a series of attacks in Southern France, including against of a Jewish school by somebody who trained with al Qaeda in Pakistan. He filmed the attacks and sent it.

And it took a phone call from the emir of Qatar to prevent that horrible footage getting out in 2012. Worry is that a pro-ISIS website now has this and they will put it out on the Twitter feed.

BLITZER: They assume this will generate good propaganda for ISIS. That's why they want to do it. We will have more on this coming up as well. Thank you.

Roughly nine million people in Iraq and Syria have been forced from their homes by ISIS militants and the ongoing conflicts in the region. You can help. For ways to donate go to CNN.com/impact. Roughly nine million people have been forced out of their homes.

The breaking news continues here in THE SITUATION ROOM. We're following all the major terror developments including new information about that Paris market attack.

Plus Mitt Romney now says he won't make a third presidential bid. Who benefits the most from Romney's decision?

(COMMERCIAL BREAK) BLITZER: Huge shift in the landscape for the next race of the White House. The former Republican nominee, Mitt Romney, now says he will not run exactly three weeks after he caught almost everyone off guard by saying he was considering a third campaign for president.

Let's talk about all of this and more with our chief political analyst, Gloria Borger, our chief congressional correspondent, Dana Bash, our national political reporter, Peter Hamby, and the political consultant, Katie, she served as the deputy campaign manager for the Romney campaign last time around.

Guys, thanks to all of you for coming in. He took himself out, Gloria. This is significant. You are getting new information about his decision. Tell us what happened.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, surprisingly, to at least some people on his staff, Mitt Romney actually made this decision last weekend. That was before his big campaign-like trip to Mississippi and before -- and after a conference call he had with his staff, which was talking about how we gear up for this campaign, how we build out the trip to Mississippi, which was a college event, making it look more like a campaign event.

But in the end -- I spoke with his son today. In the end, he said he decided that he could be the nominee, thought he was going to win the nomination, but the fear was in order to get there, it was going to be so hard fought that he could not emerge from a position of strength, meaning, rerun of 2012 against Obama and this time it would be Hillary Clinton.

BLITZER: Katie, you worked for Mitt Romney last time around. Were you surprised by this decision?

KATIE PACKER GAGE, FORMER ROMNEY DEPUTY CAMPAIGN MANAGER: You know, I think I felt it could have gone either way. Ultimately, it was going to be a decision that a very personal thing. He knew the factors. He knows what it takes to run for president.

At the end of the day, it was going to be a decision of whether or not he felt like he could emerge from a position of strength and whether or not that was a journey he wanted to go on. So, neither -- neither decision would have really surprised me. I think there were -- there was disappointment from folks on the inside but maybe a sense of relief he was saving himself from turmoil that goes on.

BLITZER: I spoke with Kevin Madden earlier today. He worked for him as well. He was surprised.

I was surprised, Peter Hamby, because he was giving all the indications in what he was saying and the body language, going after Hillary Clinton, that he was a serious candidate.

PETER HAMBY, CNN NATIONAL POLITICAL REPORTER: There's a difference between sending messages though and actually doing the work behind the scenes. I don't know if you agree with this. But over the last month, I

think it became clear -- this surfaced in this Romney conference call/meeting last Friday in Boston. His advisers gave him a pretty clear assessment of the landscape: staff that were with him last time were going to other potential candidates. Donors were going to other candidates, in particular, Jeb Bush. Which again goes to all that we're talking about, that his staff was going to be with him if he wanted to run because they are loyal to the gov.

GAGE: Mostly, very loyal.

HAMBY: Right. But they were very --

(CROSSTALK)

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yes. But my understanding is that, just as you said, they got -- he got candid assessments. But that what the staff who were doing the data collecting as they called it out in the field, not just polling but talking to key supporters in all the battleground states, the key bundler and money people was that it was doable. I talked to somebody today who said, look, could Jeb have raised more money? Of course. But Jeb has not gone through this -- the process not just once but twice as Mitt Romney has. And there's a lot to be said for that. There really is.

The flip side, though, and I think this was -- I don't know that they had to say it, if it was the elephant in the room. People know Mitt Romney for better or worse, he is the 47 percent guy. He is the guy with the cars in the garage. He is the guy -- he is the guy that talks about being severely conservative. Those are all -- for better or worse, when you are a politician, people know about you --

BLITZER: Katie, I want you to -- he did leave the door slightly, slightly open. He said I have been -- I will be asked again. If there are any circumstances whatsoever that might develop that could change my mind. It seems unlikely.

Unlikely is not no.

GAGE: I don't think he is playing a coy Elizabeth Warren game here. I think he has no intention to run. I think he is sending very clear signals.

You know, could there be a 1 percent scenario? Sure.

HAMBY: The white knight. You heard it here first.

BORGER: The white knight.

GAGE: But he -- you know, he has no intention of doing this. His team was almost 100 percent loyal. All of the senior level folks I talked to said they would be with him. You know, I think there's no candidate that wouldn't trade the sort of the strength and assets that he has going in. BORGER: But there were senior level people who they would be

with him if he wanted to do about but they were very clear eyed about what this would take and how he might --

GAGE: No one thinks it's easy.

BLITZER: Very quickly, Peter, the big winner on the Republican side from this is?

HAMBY: Chris Christie or Marco Rubio, in my opinion.

BLITZER: Why not Jeb Bush?

HAMBY: Well, because I think there is -- Jeb Bush already has a significant chunk of the Republican establishment in terms of financial support and staff. He is hiring lots of people, people from the Chamber of Commerce, people from Romney campaign, or whatever. Then there is Rand Paul who you probably could consider the grassroots frontrunner. There is a space in the middle for someone who's going to be the anti-Jeb who doesn't want to be --

Much more coming up, much more news. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: The NFL commissioner says it's been a tough year for the NFL. In his annual pre-Super Bowl news conference, he said he and the league have done a lot of soul-searching, they're taking action to address the issues confronting pro-football.

But he apparently didn't like the question posed by CNN's Rachel Nichols. Listen to this.

(BEGIN VIDEO CLIP)

RACHEL NICHOLS, CNN SPORTS ANCHOR: Rachel Nichols from CNN.

Roger, you guys have faced a lot of problems over the past year that have a really wide range. But a lot of issues have in common is a conflict of interest. When you do something like hire an outside investigator like Ted Wells into the Patriots investigation, you're still paying him and Robert Kraft who owns the Patriots is still paying you. So, even when you do everything right in one of those situations, it opens you guys up to a credibility gap with some of the public and even with some of your most high-profile players.

What steps can you guys take in the future to mitigate some of those conflict of issues -- conflict of interest issues?

ROGER GOODELL, NFL COMMISSIONER: Well, Rachel, I don't agree with you in a lot of the assumptions you make in your question. I think we have had people that have uncompromising integrity. Robert Mueller is an example who -- I think you asked me the same question last fall about a conflict of interest.

Their integrity is impeccable. Ted Wells' integrity is impeccable. These are professionals. They bring outside expertise and outside perspective. And their conclusions are drawn only by the evidence and only by the attempt to try and to identify that truth.

So, I think we have done an excellent job of bringing outside consultants in. Somebody has to pay them, Rachel. So, unless you're volunteering, which I don't think you are, we will do that.

But we have a responsibility to protect the integrity of the league, whether we have an owner that's being investigated or whether we have a commissioner that's being investigated. They're done at the highest level of integrity and quality.

(END VIDEO CLIP)

BLITZER: He said -- by the way, he said the league has done a lot of soul searching and taking actions to try to address a lot of these problems.

Let's bring back Gloria and Dana.

Gloria, I want to get your reaction to that exchange between Rachel and the commissioner.

BORGER: I think he was unduly kind of snide to Rachel. She was asking a very legitimate, hard hitting important question about conflict of interest. It wasn't about the integrity of the investigators. It's about the integrity of the league, which is what's been at issue here. And she asked a tough question and he tried a little joke which clearly didn't work. It backfired and he seemed snide and sort of shunting it aside when actually he should have answered the question directly. That's always the better course of action.

BASH: Well, first of all, I want to be Rachel Nichols when I grow up. Seriously.

BORGER: She was great.

BASH: She was great. She was tough and she was exactly right. There are very legitimate questions.

Of course, as you were saying, the people who are leading those investigations are stalwarts. I mean, there's no question.

BLITZER: The former FBI director, Robert Mueller.

BORGER: Of course.

BASH: And no one is questioning their integrity. But there are ways to pay them or there are ways to compensate them so it's not coming from the NFL, coming from the owner of one of the teams. But I'm just thinking about here in Washington. We stand up and

we ask tough questions. We sometimes get a smack down. They go after, but I will say that most of the time when a principal is attacking me for me question, it says something about hitting a nerve. She hit a nerve. And, you know, you go girl.

BORGER: Well, and she hit a nerve because he remembered that she actually asked the same question before. I would argue then be prepared for it this time, OK?

This is his issue. This is not Rachel's issue. She was doing her job as a serious journalist and he couldn't answer her question. I'm sorry.

BASH: And, you know, we -- again, we here in Washington, we're used to asking public officials who are responsible for answering questions like this. In sports, maybe -- there's a little bit less of that. In Hollywood, a lot less of that. There's a whole different situation. She was not going to just kind of roll over, and I think that's important for all of us to remember.

BLITZER: She wasn't raising questions about Ted Wells' integrity. She was saying these guys are being brought in to adjudicate what happened but they are being paid by the NFL and Ted Wells case also presumably indirectly, at least, the New England Patriots who pay the NFL.

BASH: It's the equivalent of a special prosecutor here in Washington. If something happens inside the administration, that's why they pick a special prosecutor. There's a reason for that, and it should be the same.

You've got a big job coming up this Sunday morning. Dana is going to be hosting CNN's "STATE OF THE UNION". It airs 9:00 a.m. Eastern, also at noon Eastern. This Sunday "STATE OF THE UNION" anchored this Sunday by Dana. She's got some good guests, including John McCain. Who else?